How to structure LLC

Question

I currently created a real estate LLC with my wife. We found a duplex that we are currently interested in purchasing in TX to add as our second rental. Our first rental property is located in NC. I am trying to figure out if I can make the LLC that I created in TX the parent LLC for the property in NC (thinking about making an additional LLC for this property). Questions below. Thank you for your time, consideration, and guidance in this matter.

1. Can I legally have the NC property fall under my LLC in TX? Explain.

2. Should I utilize DBAs under my TX LLC for any properties I purchase in TX, instead of creating an LLC for each additional property? Explain.

1. Can I legally have the NC property fall under my LLC in TX? Explain.

2. Should I utilize DBAs under my TX LLC for any properties I purchase in TX, instead of creating an LLC for each additional property? Explain.

Jason Malabute · Answer

From my own personal experience, every time I buy a property in a different state, I create an LLC in that same state to hold that property. Then I have a main LLC here in California that owns the out-of-state LLCs. My thinking is that California is very aggressive when it comes to taxes — it wants a share of all your income, even income earned outside of the state.

It’s also important to remember that LLCs are mainly for asset protection, not tax savings.